Marketability test for site-erected conveyor systems: permanently attached equipment was treated as not excisable as a whole.

A site-erected cross-country conveyor system, permanently attached to the earth and assessed as a whole, failed the marketability test because, once dismantled, it would not remain the same identifiable conveyor system capable of sale in the market. On that basis, the system was treated as not excisable as a whole under central excise law. The demand for duty and penalty on the conveyor system could not be sustained, and relief followed to the appellant.

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Issues: Whether the cross country conveyor system, erected at site and permanently attached to the earth, satisfied the marketability test so as to be exigible to central excise duty as a whole.

Analysis: The system was found to be 1.3 kms. long and permanently attached to the earth. The duty demand proceeded on the conveyor system as a whole, not on individual parts. Applying the principle that goods must be capable of being taken to the market and sold as such, the system, once dismantled, would not remain the same conveyor system and therefore failed the marketability test.

Conclusion: The conveyor system was not marketable as such and was not liable to excise duty in the form demanded. The impugned order was set aside and the appeal was allowed.

Final Conclusion: The adjudication confirming duty and penalty on the conveyor system could not be sustained, resulting in relief to the appellant.

Ratio Decidendi: A site-erected plant or system that is permanently attached to the earth and cannot be sold as such in the market does not satisfy the marketability requirement for excisability as a whole.

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